Which version of Village Sim are you running? It sounds like you're running the original v1.0. If so, you should try downloading and installing the v1.1 update, which was just released late last month. We've had no reports of that kind of problem with v1.1 of Village Sim. You can download v1.1 here:
http://www.ldw.com/zips/vs1_1.zip If you're already running v1.1, you should check to make sure that your Treo 650 is up-to-date. There were some reports of the Treo resetting after about 5 minutes, and the culprit was out-of-date software. There's a discussion about Treo650 resets in
this thread. You might find it useful, and there are references to other resources in there.
The reason you're seeing your old game after the reset is that you're not saving the new game after you start over. As with most Palm applications, Village Sim is not saved until you exit the game (to the launcher or to another application). When you have had the crash, the game isn't saved, and your old game is loaded when you launch Village Sim again. In v1.1, you should see the Saving Game message when you exit, so that you know it's being saved.